MIDLAND, Texas, Jan. 6 /PRNewswire-FirstCall/ -- Basic Energy Services, Inc. (NYSE: BAS) ("Basic") today reported selected operating data for the month of December 2009. During the month, Basic added four newbuild well servicing rigs and retired 12 rigs, decreasing its well servicing rig count to 405 as of December 31, 2009. Well servicing rig hours for the month of December 2009 were 39,100 producing a rig utilization rate of 39%, a decrease from 41% and 51% recorded in November 2009 and December 2008, respectively.
Drilling rig days for the month of December 2009 were 169 producing a rig utilization of 61%, an increase from 48% in November 2009 and a decrease from 66% in December 2008.
Basic's fluid services truck fleet count decreased by a net of one truck bringing its total to 791 trucks as of December 31, 2009.
Ken Huseman, Basic's President and Chief Executive Officer, stated, "Our December well servicing hours were essentially flat with prior months with improving demand offsetting reduced daylight hours, holiday disruptions and severe winter weather. This improved activity level is an encouraging indicator of the higher demand we anticipate experiencing in all our business lines and geographic markets in 2010.
"The much improved commodity price levels and the apparent bottoming of the current downturn gave us the confidence to begin deploying a portion of our cash reserves in the fourth quarter to expand our business and footprint. We purchased six new or nearly-new rigs during the fourth quarter for use in the fast-growing Williston Basin market. The purchased rigs conform to the restrictive highway weight laws found in North Dakota. We also invested $6 million in new or late model fluid services assets, including 60 frac tanks for deployment in that same market. Most of those assets were acquired at significant discounts to replacement cost from auctions or other distressed sales. We'll use that equipment to expand our long-standing Williston Basin operations and capture a bigger share of the Bakken Shale completion activity that is projected to occur over the next several years.
"In addition to those internal growth initiatives, we re-entered the acquisition market by closing our first acquisition since September 2008 with the purchase of the assets of Team Snubbing Services, Inc. ("Team") on December 28, 2009. Team, based in Conway, Arkansas, operates a fleet of eight snubbing units in the Fayetteville Shale market. The growing demand for well intervention work related to the substantial existing well count in the area augmented by the extensive drilling programs planned for the next several years prompted our entry in this market. We believe the strength of the Team management and franchise in the area will support adding a number of our other services over the course of 2010. Projected annual revenue from these assets is expected to be $5 million.
"Although the outlook is generally positive, we expect a very competitive market with both pricing and margins pressured by too much equipment chasing available work. All in all, we finished a tough year on a very positive note and are looking forward to the growth opportunities we expect to see in 2010."
Month ended ----------- December 31, November 30, 2009 2008 2009 ---- ---- ---- Number of weekdays in period 23 23 21 Number of well servicing rigs:(1) Weighted average for period 401 413 414 End of period 405 414 413 Rig hours (000s) 39.1 52.8 39.2 Rig utilization rate(2) 39% 51% 41% Number of drilling rigs:(1) Weighted average for period 9 9 9 End of period 9 9 9 Drilling rig days 169 183 130 Drilling utilization 61% 66% 48% Number of fluid service trucks: Weighted average for period 792 815 792 End of period 791 819 792 (1) Includes all rigs owned during periods presented and excludes rigs held for sale. (2) Rig utilization rate based on the weighted average number of rigs owned during the periods being reported, a 55-hour work week per rig and the number of weekdays in the periods being presented.
Basic Energy Services provides well site services essential to maintaining production from the oil and gas wells within its operating area. The company employs more than 3,800 employees in more than 100 service points throughout the major oil and gas producing regions in Texas, Louisiana, Oklahoma, New Mexico, Arkansas, Kansas and the Rocky Mountain States.
Additional information on Basic Energy Services is available on the Company's website at http://basicenergyservices.com.
Safe Harbor Statement:
This release includes forward-looking statements and projections, made in reliance on the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Basic has made every reasonable effort to ensure that the information and assumptions on which these statements and projections are based are current, reasonable, and complete. However, a variety of factors could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this release, including (i) changes in demand for Basic's services and any related material impact on our pricing and utilizations rates, (ii) Basic's ability to execute, manage and integrate acquisitions successfully and (iii) changes in our expenses, including labor or fuel costs and financing costs. Additional important risk factors that could cause actual results to differ materially from expectations are disclosed in Item 1A of Basic's Form 10-K for the year ended December 31, 2008, and subsequent Form 10-Q's filed with the SEC. While we make these statements and projections in good faith, neither Basic Energy Services nor its management can guarantee that the transactions will be consummated or that anticipated future results will be achieved. Basic assumes no obligation to publicly update or revise any forward-looking statements made herein or any other forward-looking statements made by Basic, whether as a result of new information, future events, or otherwise.
Contacts: Alan Krenek, Chief Financial Officer Basic Energy Services, Inc. 432-620-5510 Jack Lascar/Sheila Stuewe DRG&E / 713-529-6600
SOURCE Basic Energy Services, Inc.